How Did Market Basket Analytics Help a Telecom Company Develop Combo Offer Plans for their Customer and Increased Revenue Opportunities?

Aug 29, 2022

Highlights of the Case Study 

Particulars Description 
Client Our client is the leading communication service provider based in the UK that offers broadband services and conventional 2G, 3G, 4G, and the upcoming 5G LTE services. 
Business Challenge Our client faced fierce competition from rival firms and witnessed a severe slowdown in its country-wide operations. The client wanted to offer combo plans that engage and retain its customer base. 
Impact Quantzig leveraged its market basket analytics solutions to identify customer needs based on the subscription data and compared it with the purchases by the other subscribers to suggest the best combo offers.  

Game-Changing Solutions for the Telecom Industry 

Let’s first understand the importance of market basket analysis. The telecommunication industry has become highly competitive, so telecom service providers compete aggressively to attract customers. Diversification and continuous innovation are the two driving features of this industry. However, since all the vendors operating in the telecom industry manage to obtain the latest technology, it is a level playing field in terms of technical excellence. Since most network operators provide the same services, customers choose the service provider based on the diversified offerings and value-added services. The industry demands new offerings – an improvement over the regular service frequently. Competitors differentiate data bundles and combo offerings with value-added services at competitive rates. 

Quantzig’s market basket analysis is a product bundling technique that helps telcos understand and assist their users by providing a value-added offering that supplements their needs and meets their daily data requirements. Our Market Basket Analysis solutions track purchasing trends based on the monthly subscription data to gain insights into customer requirements and thus determine what combo plan configuration will sell the most. These insights help telcos target customers with the right plan, which will drive conversions and thus help telecom companies improve their margins.  

The Challenges of the Telecom Client 

Our client is a leading communication service provider in the UK that offers broadband services and conventional 2G, 3G, 4G, and the upcoming 5G LTE services. Our client has been a leader in the telecom industry until recently when a competitor took over its position. The fierce competition from rival firms has led to a severe slowdown in its operations.   

The client partnered with Quantzig to retain its customers and reduce the churn rate by offering customer-centric services. Quantzig’s customer journey analytics solutions combine predictive modeling and dynamic micro-segmentation techniques to forecast customers’ lifetime value based on demographics, purchase data, and other buying decision traits. These insights will help the client to design combo offer plans that engage and retain its customer base.  

Quantzig’s Market Basket Analytics Solutions 

Quantzig’s market basket analytics solutions leveraged AI to identify customer needs based on the subscription data and compared it with the purchases by the other subscribers to suggest the best combo offers.   

The customer analytics team at Quantzig identified that customers want their service providers to provide a combo offer plan that reduces their combined cost.  Moreover, they found that customers prefer that all the services come from one service provider. With these insights, our client replaced its traditional bundling approach and paired the smartphone and wireless offerings with the fixed broadband connection in one subscription.  

Impact Analysis of Quantzig’s AI-based Market Basket Analysis  

Quantzig’s AI-driven market basket analysis automated choosing the best combo plans based on customer categorization by developing a product recommendation engine. This helped the client attain the following benefits:  

  • The client’s average revenue per user increased (ARPU) 
  • Churn rated reduced by 30% 
  • Significant reduction in subscriber acquisition costs  
  • Revenue increased by 50% 
  • Regained its market leadership position within a year  

As a result of this successful alliance, the client enrolled our AI technologies and automation to spot network congestion and proactively address the issue before it affected the user experience.  

Market basket analytics solutions for telecom providers.

Key Outcomes of Market Basket Analytics: 

Our intervention helped the client create an automated recommendation engine based on detailed customer analysis. These recommendations will cater to the specific needs of specific customers and are thus more likely to be adopted by the customer. This helped the client prevent customer churn and expand its customer base to add new customers to its fold. Understanding the customer’s needs is imperative to identifying cross-selling opportunities and ensuring business growth in the highly competitive telecom industry. 

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Broad Perspective on the Role of Customer Analytics in the Telecom Sector 

The telecom sector is gathering relevance in consumers’ lives due to several factors such as widespread internet use for information, education, shopping, business, and employment. Therefore, prioritizing 5G infrastructure development to meet the rising expectations regarding reliability, speed, and coverage is essential. In addition, creating unique, non-conventional, value-driven bundles incorporating 5G offerings is equally crucial for telecom companies to prevent churn rates and increase new customer acquisitions. However, identifying the correct value-added service for each customer in the right combination and at the best price point is difficult, especially when the new technology is also available with the competitors.  

Advanced customer analytics solutions offered by Quantzig can help companies to create the perfect combo offer targeted to specific consumer segments based on careful analysis of past consumption patterns and usage trends. 

Key Takeaways 

  • Increased the average revenue per user  
  • Reduced churn rate by 30% 
  • Reduced the subscriber acquisition costs significantly due to targeted promotions 
  • Increased total revenue by 50% 
  • Regained market leadership position  
  • Created an automated recommendation engine  

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